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Performance measurements through indicators‏

Every government body, organization or company has their own respective performance, which required to be measured their performance on periodical basis in an effort knowing the standard of that particular performance by applying a list of performance indicators. This process i known as key Performance Indicators (KPI),Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), help an organization/government/company, which defines and measure progress towards organizational goals. Once an organization has analyzed its mission, identified its entire proprietor, and defined its goals, it needs a way to measure progress toward those goals. Key Performance Indicators are those measurements.

 

What Are Key Performance Indicators (KPI)

 

Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of organization/government/company etc. They will differ depending nature of the organization.A business may have as one of its Key Performance Indicators the percentage of its income that comes from return customers. A school may focus its Key Performance Indicators on graduation rates of its students. A Customer Service Department may have as one of its Key Performance Indicators, in line with overall company KPIs, percentage of customer calls answered in the first minute.A Key Performance Indicator for a social service organization might be number of clients assisted during the year.

 

Whatever Key Performance Indicators are selected, they must reflect the organization’s goals, they must be key to its success, and they must be quantifiable (measurable). Key Performance Indicators usually are long-term considerations. The explanation of what they are and how they are measured do not change often. The goals for a particular Key Performance Indicator may change as the organization’s goals change, or as it gets closer to achieving a goal.

 

Key Performance Indicators Reflect the Organizational Goals

 

An organization that has as one of its goals “to be the most profitable corporation in our will have Key Performance Indicators that measure profit and related fiscal measures. . However, “Percent of Profit Contributed to Community Causes” probably will not be one of its Key Performance Indicators. On the other hand, a school is not concerned with making a profit, so its Key Performance Indicators will be different. KPIs like “Graduation Rate” and “Success in Finding Employment after Graduation”, though different, accurately reflect the schools mission and goals.

 

Key Performance Indicators Must Be Quantifiable

 

If a Key Performance Indicator is going to be of any value, there must be a way to accurately define and measure it. “Generate More Repeat Customers” is useless as a KPI without some way to distinguish between new and repeat customers The generally accepted Company won’t work as a KPI because there is no way to measure the company’s popularity or compare it to others.

 

It is also important to define the Key Performance Indicators and stay with the same definition from year to year. For a KPI of “Increase Sales”, you need to address considerations like whether to measure by units sold or value of sales. Will returns be deducted from sales in the month of the sale or the month of the return? Will sales be recorded for the KPI at list price or at the actual sales price? You also need to set targets for each Key Performance Indicator. A company goal to be the employer of choice might include a KPI of “Turnover Rate.

 

In conclusion, can we measure whatever thing? Yes, there is nothing that we cannot measure. But at the same time we have to be aware that we can’t design perfect indicators that will measure things perfectly. KPIs give us information which helps us to make better informed decisions. It is about reducing uncertainty and it is therefore okay to use substitute indicators as when applicable.

 

Ismail lugweyne.

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